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8A Page 18 homeowners who will face unaffordable interest rate increases in coming years. Members said federal action was needed to unlock credit markets for state and local governments-and for the small businesses and start-up companies that fuel growth in California's economy. Set the stage for long-term growth. California can be a national leader in developing infrastructure projects that support environmental goals If leaders focus on long-term growth rather than stop-gap measures, task force members said. They were unified in opposing action that would hurt the state's environmental leadership role or harm the health and safety of its residents. They would not delay the regulation of diesel truck emissions, for example, despite its short-term negative economic impact. Specifically, the group felt the state should: . Prioritize infrastructure and "green" projects. The task force recommended that the state consider infrastructure investment in two phases. The first would consist of projects, such as road repair, that are ready to begin as soon as possible, use existing funds, and would create jobs today. The second would encompass projects that take more time to plan but could raise California's long-term productivity and help the state achieve environmental goals-for example, building a smart electricity grid. . Consider ways to streamline state regulations. The group said leaders need to find ways to spend faster on infrastructure projects and develop more flexibility in the system. For instance, the state could benefit from exploring best practices for "design-build" construction contracts. Most states allow these contracts, which allow a single company to both design and build a project. . Invest in education. Task force members emphasized the need for investing in education facilities and programs at all levels in light of the growing gap between the need for college-educated workers and the likely supply of these workers. Balance the budget. The primary mandate of the task force was to focus on economic recovery, but members were united in the view that steps to end the budget crisis should be considered part of an economic recovery program. They said the state's elected leaders must balance the budget even though measures to do so run counter to economic recovery. Specifically, they recommended that leaders: . Choose budget-balancing actions that do the least harm. Members agreed that such actions would need to take the form of tax increases and spending cuts but, given the depth of the current downturn, specific fiscal actions should be considered in Ilght of the overall goal of economic recovery. Tax increases should be broad and temporary, with the smallest possible negative effect on new consumer and business spending. Spending cuts should have the smallest possible negative effect on overall employment. . Pursue permanent, fundamental budget reform. The group agreed that annual state budget crises pose a serious threat to the state's long-term economic stability and emphasized the critical importance of the Commission for the 21st Century Economy, appointed by Governor Arnold Schwarzenegger and Assembly Speaker Karen Bass to consider ways to restructure the tax system. . Make a stronger case to use federal funds to help close the current budget gap. A grant from the federal government would reduce the tax increases or spending cuts that the state will otherwise have to make. PPIC set up the California Ecdnomic Recovery Task Force at the request of Senate President pro Tem Darrell Steinberg with the active support of Senate Republican Leader Dave Cogdill, Assembly Speaker Karen Bass, and Assembly Republican Leader Mike Villines. PPIC selected bipartisan leaders with experience in both the private and public sectors to co- chair the task force: Kathleen Brown, senior advisor and head of public finance for the west region at Goldman, Sachs & Co. and former California state treasurer, and Daniel Young, president of the Irvine Community Development Company and a former mayor of Santa Ana. The other members were: 12